Washington (CNN) -- Republican Christine O'Donnell, who lost her bid for U.S. Senate from Delaware, is lashing out at reports the Justice Department and FBI have launched a criminal investigation into possible misuse of campaign funds for personal expenses, calling any such probe "thug tactics."

Justice Department prosecutors and FBI agents have started the investigation, a source with knowledge of the probe confirmed to CNN. The source could not speak on the record because of the investigation is deemed sensitive. The source would not provide any further details and the FBI and Justice Department had no comment.

When O'Donnell ran in the Republican primary and in the general election campaign, she faced repeated questions about her finances, including the use of her home that doubled for a time as her campaign headquarters. She acknowledged using some campaign funds to help pay the rent but is adamant she did not nothing wrong.

The advocacy group Citizens for Responsibility and Ethics in Washington (CREW) filed complaints with the Federal Elections Commission and the U.S. Attorney's Office in Delaware regarding her finances, asking for investigations of her alleged use of campaign funds for personal expenses.

"We've been warned by multiple high-ranking Democrat insiders that the Delaware Democrat and Republican political establishment is jointly planning to pull out all the stops to ensure I would never again upset the apple cart," O'Donnell said Wednesday in a statement after the Associated Press first reported the FBI and Justice Department were in the early phases of an investigation

O'Donnell defends financial record

Tracking Christine O'Donnell's spending

O'Donnell dodging tough questions?

Christine O'Donnell ad: 'I'm not a witch'

"Specifically they told me the plan was to crush me with investigations, lawsuits and false accusations so that my political reputation would become so toxic no one would ever get behind me. I was warned by numerous sources that the (Delaware) political establishment is going to use every resource available to them," she said in the statement.

Justice Department spokeswoman Laura Sweeney acknowledged to CNN that the U.S. Attorney's office in Delaware had agreed to review the initial complaint filed by CREW. However, Sweeney declined to say whether federal prosecutors and FBI agents had gone beyond the initial review.

O'Donnell's statement continued: "I have faith that our supporters and the general public will see right through these thug tactics. This is simply an Establishment trick to stop the anti-establishment Tea Party movement in its tracks. Heck, the Presidency is at stake in 2012."

O'Donnell's campaign manager, Matt Moran, said he and other staff members "have heard absolutely nothing" about any investigation beyond "unsubstantiated allegations and rumors that have been circulating in the press for months." He said the campaign will fully cooperate to make sure it is in compliance with all rules and regulations.